Jury finds Elon Musk misled investors during Twitter purchase, absolves
him of some fraud claims
[March 21, 2026] By
BARBARA ORTUTAY
SAN FRANCISCO (AP) — A jury has found Elon Musk liable for defrauding
investors by deliberately driving down Twitter's stock price in the
tumultuous months leading up to his 2022 acquisition of the social media
company for $44 billion. But it absolved him of some fraud allegations,
finding that he did not “scheme” to mislead investors.
The civil trial in San Francisco centered on a class-action lawsuit
filed just before Musk took control of Twitter, which he later renamed
X. Jurors were asked to decide if two tweets and comments Musk made on a
podcast in May 2022 amounted to him intentionally defrauding Twitter
shareholders, who sold their shares based on Musk's statements.
The nine-person jury returned the verdict after nearly four days of
deliberation, nearly three weeks after the trial began on March 2. They
said that while Musk was liable for misleading investors with two tweets
— including one said the Twitter deal was “temporarily on hold,” he did
not do so with a statement he made on a podcast and that he did not
intentionally “scheme” to defraud investors.
The jury awarded shareholders between about $3 and $8 per stock per day
as damages, which the plaintiffs' lawyers said amounts to about $2.1
billion in stock and another $500 million in options. Musk's fortune is
currently estimated at about $814 billion, much of it tied up in Tesla
shares.
“It’s an important victory, not just for investors of Twitter, but for
the public markets,” said Mark Molumphy, an attorney for the plaintiffs.
"I think the jury’s verdict sends a strong message that just because
you’re a rich and powerful person, you still have to obey the law, and
no man is above the law.”
Musk's legal team referenced other cases Musk won and said they will
appeal.
“Last month, Elon won the largest appellate victory in this country’s
history after getting an unfair shake at the trial level. Earlier today,
in a Texas court he won another appellate victory in which the trial
judge was reversed," the legal team at Quinn Emanuel Urquhart & Sullivan
said in a statement. “We view today’s verdict, where the jury found both
for and against the plaintiffs and found no fraud scheme, as a bump in
the road. And we look forward to vindication on appeal.”
Much of the trial focused on Musk’s claims about the number of bots on
Twitter. Musk testified that Twitter had a much higher number of fake
and spam accounts than the 5% it disclosed in regulatory filings. He
used what he called Twitter’s misrepresentation of the number of fake
accounts on its service as a reason to retreat from the purchase.
After Musk tried to back out, Twitter went to court in Delaware to force
him to honor his original deal. Just before that case was scheduled to
go to trial, Musk reversed course again and agreed to pay what he had
originally promised.
The central question of the case was whether Musk sent out tweets —
including one on May 13, 2022, that said the Twitter deal was
“temporarily on hold” while he sought information on the number of fake
accounts on the service — as a deliberate scheme to tank Twitter’s
shares. The jury found that while Musk did mislead investors with two
tweets, he did not do so with a statement he made on a podcast because
it was an opinion. The jurors also absolved him of scheming to drive
down the stock.
[to top of second column] |
 The nearly three-week trial in San
Francisco federal court for the Northern District of California saw
testimony from former Twitter executives including CEO Parag Agrawal
and CFO Ned Segal, as well as Musk, who was on the stand for more
than a day.
In his testimony, Musk maintained that Twitter’s leadership lied
about the amount of bots on the platform and withheld information
from him about how the number of fake accounts was calculated. He
repeatedly described the information that Twitter’s board provided
with an abbreviation for a bull’s scatology. “I did make it clear
that I thought it was BS,” Musk said of Twitter’s calculations
asserting that only about 5% of its accounts were bots.
Musk also asserted that his decision to follow through on the deal
at the original sales price provided a huge windfall for most
Twitter shareholders.
But Twitter’s shares fell below $33, or about 40% below Musk’s
original purchase price, while the deal was hanging in limbo. That
downturn cost shareholders who sold their stock during the
uncertainty caused by what the lawsuit alleges was Musk’s deceitful
behavior.
“I can’t control whether people sell their stock, but everyone who
held the stock fared extremely well,” Musk said.
The plaintiffs argued that, as Tesla’s stock price declined and
buying Twitter became too expensive for Musk, he tweeted statements
that drove down the stock price in the hopes he could renegotiate
the deal for a lower price or get out of it altogether.
Musk’s tweets, the plaintiffs’ lawyer argued, were not some
“innocent mistake” or a “stupid tweet” off the top of his head, but
carefully calculated to drive down’s Twitter’s stock price.
In closing arguments, Mark Molumphy, a lawyer for the plaintiffs,
asked jurors to hold Musk accountable and compensate thousands of
investors who lost money because of tweets Musk sent, including one
from May 13, 2022, that said the deal was “on hold.”
“He knew what he was doing,” Molumphy said.
Musk’s lawyers motioned for a mistrial several times during the
contentious trial, contending that the billionaire Tesla CEO can’t
get a fair trial in San Francisco because of animosity toward him
from the public.
This isn’t the first time that Musk has been dragged into court to
defend himself against allegations of duping investors with his
social media posts. Three years ago, Musk spent about eight hours
testifying in a San Francisco federal trial about his plans to buy
Tesla — the electric automaker that he still runs as a publicly
traded company — for $420 per share in a proposed 2018 deal that
never materialized. A nine-member jury absolved Musk of wrongdoing
in that case.
Monte Mann, a business litigation lawyer who was not a part of the
case, said the "verdict sends a clear message—if you move the market
with your words, you own the consequences.”
“The law has always prohibited misleading statements. What’s new is
the scale and speed," Mann said. "When one person can move billions
with a tweet, the consequences of those statements are amplified —
and juries are starting to take that seriously.”
All contents © copyright 2026 Associated Press. All rights reserved |
